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|Archives - July 2009|
|Wednesday, June 24, 2009|
Lithia went public in 1996 and grew from five stores to more than 90 over one freewheeling decade. CEO Sid DeBoer had hoped to build the company into an $11 billion empire by 2011, but that was before his key suppliers, Chrysler and GM, fizzled into bankruptcy. Lithia struggled mightily in 2008, losing $252 million for the year.
But then a surprising thing happened in the first quarter of 2009: Lithia posted a profit. Its stock, which bottomed out at $2 per share in April, rebounded powerfully on news that Chrysler’s abrupt elimination of 789 underperforming stores would help rather than hurt Lithia. “We lost two stores, but we should be able to pick up nine additional franchises in five of our current locations,” says DeBoer.
Three Lithia stores are also at risk from the GM bankruptcy, but it could have been much worse. Lithia minimized its losses by deciding in the fourth quarter of 2007 to begin conserving cash and selling off unnecessary assets. The company sold 14 dealerships in 2008 and has lightened its debt load from $269 million to $45 million while slashing its workforce from about 6,000 to 4,300. “It was painful,” says DeBoer. “A lot of people lost their jobs and we lost some stores that we would like to have kept in good times.”
But it worked. According to DeBoer, sales in May exceeded Lithia’s projections. “All the stores we’ve sold or closed were losing money,” he says. “We will make more money without them.”
It won’t be a Sunday drive. Lithia still has 11 dealerships on the market as of press time, and gas prices are rising again. But DeBoer says he feels much better about Lithia’s position than he did a year ago, and he’s thankful he called for the radical shift in strategy sooner rather than later.
“Having lived in the car business since 1964,” he says, “I’ve learned that those who act the fastest get through these things in the best shape.”
Monday, September 28, 2015
BY KIM MOORE
A conversation with Jonathan Bennett, managing partner at law firm Dunn Carney Allen Higgins & Tongue.
Wednesday, August 19, 2015
BY AMY MILSHTEIN
Training, from the mundane to the sublime, bolsters companies and workers in an uncertain world.
Thursday, August 20, 2015
BY DAN COOK
The state’s angel investing fund gets hammered in Salem.
Monday, September 28, 2015
BY JACOB PALMER
Live, Work Play with the President and CEO of Tillamook County Creamery Association.
Wednesday, August 26, 2015
BY LINDA BAKER
A new co-working model disrupts office sharing, child care and work-life balance as we know it.
Thursday, September 10, 2015
BY JACOB PALMER | DIGITAL NEWS EDITOR
The Oregon Office of Economic Analysis released a report on the vitality of rural Oregon this week. Media reports focused on the number of Californians moving to the "Timber Belt," but the document contained other interesting insights regarding regional challenges and successes.
Thursday, August 27, 2015
BY LINDA BAKER
How do you put a baby on the cover of a business magazine without it looking too cutesy?
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